Dutch Bros is Monday's pick for IBD 50 Growth Stocks To Watch as the coffee shop name continues to show steady sales growth and open new stores. Dutch Bros stock is in a cup-with-handle base awaiting its next move.
The IBD 50 and IBD SwingTrader name is pulling back around 3% Monday. But shares remain above their 21-day exponential and 50-day moving averages.
Dutch Bros operates and franchises drive-thru coffee shops. It opened 30 new locations in the first quarter, bringing the total number of coffee shops to 1,012 at the end of March, spanning 18 states. The company plans to open at least 160 shops in 2025.
It ranks No. 2 out of 55 stocks in IBD's Retail-Restaurants group, which holds the 27th spot out of the 197 industry groups that Investor's Business Daily tracks.
Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks
Dutch Bros Stock Needs A Jolt
Dutch Bros stock is in a third-stage, cup-with-handle base with a 73.93 buy point, according to MarketSurge pattern recognition.
Shares jumped 25% in the two weeks following the company's positive earnings report on May 7. The stock pulled back to form a 13% deep handle and is around 5% below the entry point.
It's 10-week moving average is starting to tick back up after falling in April.
The stock has outperformed 96% of stocks over the last 12 months and has gained around 32% so far this year. Despite the robust move higher, it remains around 20% off its all-time high reached Feb. 18.
The stock started trading Sept. 15, 2021, with an offer price of 23 per share.
Coffee Shop Sees Growth Spurt
Dutch Bros beat first-quarter earnings and sales estimates May 7. It reported 14 cents-per-share profit vs. nine cents per share in the prior year, or 56% growth. Revenue climbed 29% and has averaged around 32% over the last eight quarters.
"We delivered exceptional results in the first quarter, starting 2025 on a high note with continued momentum," Dutch Bros Chief Executive Christine Barone said in the earnings report.
Dutch Bros reaffirmed its 2025 sales outlook of $1.555 billion to $1.575 billion. Further, the company has a three-year sales growth rate of 34% according to IBD Stock Checkup.
Analysts' full-year 2025 profit estimates show 20% growth, followed by 38% in 2026. This follows an 88% increase in 2023 and 63% in 2024.
Mutual funds hold 77% of shares. Five IBD Mutual Fund Index names owned Dutch Bros stock at the end of March including Fidelity Contrafund and Lord Abbett Developing Growth.
Also, it holds a 97 out of a best-possible 99 Composite Rating and a 98 Earnings Per Share Rating.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
